Capital Briefs: Montana Opts Out of Interstate Branching Law

Montana has become the second state to opt out of the Riegle-Neal interstate branching law.

Gov. Marc Racicot signed a sweeping banking law March 21 that forbids interstate branching until Sept. 30, 2001.

Texas is the only other state to reject the new federal branching law.

That state's prohibition expires in 1999.

However, Montana's law permits statewide branching for the first time.

Previously, banks there could only branch within their home county and adjoining counties.

The package signed by Gov. Racicot also simplifies state branching and merger requirements and increases permissible fixed-asset investments from 50% of a bank's capital to 100%.

Arkansas and Nebraska approved interstate branching in March. Both state laws are effective May 31 and allow interstate branching by acquisition only.

Also, both states required that any acquired institution be at least five years old.

So far, 44 states, the District of Columbia, and Puerto Rico have approved interstate branching, which becomes effective nationwide on July 1.

The remaining states-Kansas, Ohio, Missouri, and Wisconsin-are expected to approve interstate branching by July.

-Staff and wire reports